Personal Finance 

Stupid-Proof Budgeting

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One of the first things you will hear from anyone who is helping you with your finances is about budgeting. A budget is usually the difference between someone who has their finances under control and someone who doesn’t. The problem is that budgeting is often on the to-do list right up there with “going to the dentist” and “cleaning the toilet.” You know you should do those things but really don’t want to.

If you are like me and hate budgeting, I’ve got a stupid-proof easy way to do your budget. After getting setup, it requires about 10 minutes or less per week to maintain and will help you develop a fully functional budget.

What You’ll Need

  1. A computer. Any computer will do.
  2. An internet connection. You are probably reading this via the internet anyways.
  3. Access to online banking. If your bank doesn’t offer this for free, get a new bank.
  4. A account. It’s free. Just head on over to
  5. A good 2 hours and a lot of determination to get it setup. Don’t worry! Once it’s setup, it’s quick and easy from there.
  6. Once you have all of these, you are ready to get started.

Step 1 – Get your Mint account up and running

Head on over to and add all of your accounts. You can add checking accounts, mortgage accounts, credit cards, and even investments. Certain items may not have online access such as your mortgage, but do the best you can.

Once you put all of the information in, you should have a nice list of what you’ve got working for you off to the left, which will look like this:

Accounts Summary

You might also notice at the bottom that you can add Property. This will help you determine your Net Worth and help you stay focused on goals such as paying down your debt or increasing your wealth. It’s always nice watching your Net Worth increase (or at least go from negative to positive).

You will have to manually give an estimate on what these items are worth. You can use for an estimate on your house and Kelly Blue Book for your vehicles.

Property Summary

Now I should note that this Net Worth number may be inaccurate if you don’t have access to or choose not to add all of your accounts online. For instance, I have some investments with Fidelity that are not listed. The important thing is to watch this number get better as time goes on.

Step 2 – Create your rough budget

There are many great ways to start a budget. I won’t go into great detail as that would be a whole article in itself but here’s basically what I do:

First, pull out a pen and paper or use an Excel Spreadsheet to list your income and expenses. I throw all of my regular monthly bills (the type that usually come in the mail) into a big category. So my cell phone, electric, water, mortgage, etc all get lumped together. These bills might change slightly from month to month but overall they stay relatively consistent so I don’t worry about them at all.

Then I take the remaining income after my bills and divide it up into micro-budgets. These budgets are completely decided by me.

We decided to have a discretionary spending fund for my wife and myself each month. We like to go out on dates and have a date night category. We also take my wife’s little brother out to movies and such and have a category for that. You could use a more generic “Entertainment” category and throw all of those micro-categories into it if that’s what you like. It’s totally up to you however it’s better to be more specific than more generic.

You will obviously need “Grocery” and “Gas/Fuel” categories so don’t forget those but for everything else just make up a budget that works for you.

Step 3 – Categorize items on Mint

Now comes the really long boring part. Please bear with me through this because it’s very important.

You are going to go online and put every item for this month and last month into their appropriate categories. Under the “Transactions” tab on Mint is where you do this. You can create new sub-categories as needed. We put “CJ’s Shopping” under the main Category “Entertainment” as it’s an entertainment type of category.

I know this takes a while but you just have to grit your teeth and do it. Make sure you do last month’s as well. Last month’s spending will help you figure out if you were WAY off on a budgeted amount for a particular category and you can adjust accordingly.

Step 4 – Create micro-budgets

Now you go into Mint and create micro-budgets to watch these extraneous categories. This happens on the “Overview” page. This is where the “magic” happens.

Here’s an example of what my micro-budgets look like:


Now let me explain what you are looking at. You can see the category names on the left. Don’t worry if your categories are completely different. Do what works for you.

The numbers on the right are for the amounts I decided to put into each budget. I’m trying to stay below this amount each month.

The black line in the middle shows how far through the month we are with the date at the bottom. As you can see, when I was writing this article we were half way through June.

The colored bars show what percentages of my budgets I have spent with the actual amount I’ve spend on the end. Green means I’ve spent less of a percentage than the percentage we are through the month (I.E. We’re 50% through the month but I’ve spent less than 50% of the budget for that category). Yellow means I’ve spent higher than the percentage we are through the month. Finally orange means we’ve overspent in that budget.

Lastly note that although we are a bit overspending in a few categories, the Total at the bottom still shows we are under our spending limit. The ultimate goal is make sure that the Total bar never turns orange.

This should give you up to date information on how you are doing throughout the month. It’s OK if you slightly overspend in some categories as long as you make up for it in others. If you notice that month after month you overspend in a particular category, then increase the budget for that category and reduce another category.

Step 5- Maintain the budget puts certain items into certain categories well but doesn’t do much about custom categories. For instance, all of my Bashas or Safeway transactions automatically get put into the “Groceries” category but if I bought a book on, it won’t know to put that in “CJ’s Spending.” So each week (or day if you so choose) just take a few minutes and clean up the transactions to make sure they go in the proper category. It literally takes me less than 10 minutes each week to do that.

It’s important to schedule a time and date to go over your finances. Otherwise you will get complacent and forget about it. If you are married, make sure you and your spouse sit down together so you both are on the same page on what categories you can spend in and which ones are off limits (the dreaded orange categories).

When a budget turns orange or gets close to orange, STOP SPENDING!!! It’s really that simple. As you can see, my wife has no more discretionary spending left this month. She took a trip to Washington to visit her sister and spent her budget. That’s ok that she did that but she knows now that her spending is finished. You have to agree with your spouse and yourself that once a budget is full, it’s over. Nor more spending PERIOD!

If you stick to this, it will make budgeting very easy and straight forward. Trust me, I hate budgeting so anything to make it easy and painless is great by me.

One final note: If you own an iPhone or an iPod Touch, there is a great little app that will help you track your Mint budget from wherever you are. You can search for it in the iTunes App Store or click this link.

This is a guest post from CJ Perry at Wise Money Matters. CJ focuses on basics of personal finance with the intention of helping people get out of debt. You can visit him online at or subscribe to his podcast on iTunes via this link.

{ 17 comments, please add your thoughts now! }

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17 Responses to “Stupid-Proof Budgeting”

  1. tom says:


    Is that $1,700 you budget each month the net of all other expenses (mortgage, payments, etc.)?

  2. Tizzle says:

    I tried It only worked with one of my bank accounts. I use a credit union, and ingdirect, which don’t seem to be able to be integrated. Also, perhaps they’ve updated it, but the iPhone app was never up-to-date.

    I really want to like Mint, I do! When I left them, I explicitly told them why (they seem responsive).

    I hear about Mint from so many blogs like this. I would love to read about another, different solution. This seems so simple and eye-catching.

  3. Modder says:

    While I get that this budget is illustrative I am still shocked to see tithing as the biggest line item at 20% of total budget. And then there is extra giving … bringing up the total to 30%.

    As an atheist I have no-one pressuring me to give. So I had no idea how much religious people give. But 20 or 30% way exceeds what I expected.

  4. Kathryn says:

    I look forward to the day we have in Canada. Until then, we use wesabe which is good but not nearly as good as mint.

  5. emma says:

    I also tried Mint several months ago, and unless they updated their site, I couldn’t use several accounts with the auto upload feature, and others had to be manually imported every month. It was more trouble than an excel spreadsheet. Though I really, really like the idea.

  6. Kyle says:

    Anyone know when they are going to publish a MINT for Canadians?

  7. Craig says:

    @Tizzle @Emma @Kathryn

    Full Disclosure: is another personal budgeting software that may be of interest. syncs with personal account information. We do not. Our users manually input their data or can import their financial bank statements in minutes. Our tool is international compatible and can be used with any bank or credit union. We also have the ability to track cash transactions. If anyone has any questions, please feel free to contact me.

    Craig Kessler
    Marketing Director at BudgetPulse

  8. sarah says:

    I love Mint! I just switched over to it a few months ago. If Mint wont work for you, another great tool to try out is Yodlee. Its completely free & secure. I used it for years until they quit supporting my bank (small local bank). Check it out & see if it supports the financial institutions that you use.

  9. Mat says:

    I tried Mint too and while it worked with my accounts, I had issues with it’s features. I can see where it will be good in the future with more development, but right not it’s pretty wonky.

    The being said, I’ve been using Yodlee and have been enjoying it so far. If you can’t use or don’t like Mint I highly suggest checking out Yodlee.

  10. @Tom
    This is just “variable” expenses. It doesn’t include mortgage or anything of the sort. It is what’s left over after those bills. We also have an extra $300 that we put into long-term savings every month.

    @All anti-Mint people
    I’m not saying that Mint is the BEST option out there. It is just the one that I use and enjoy. Frankly, I only use this stuff you see from Mint. I don’t really check their “Trends” options or any of the other features because I hate budgeting. Mint made budgeting really easy for me.

    I recently found out that Quicken Online has a similar structure for this type of thing. And there’s several other similar options out there. Do what works for YOU. I just found that this setup worked great for me and thought I’d share it.

    Tithe is 10% of our income. That is what the Bible tells us to do. When we started doing that consistently, we doubled our income a few months later. After that we doubled our giving. 10% for tithe. 5% for Extra giving which is to take kids from the youth out to lunch or this month we’re donating to the local Christian Radio Station. 5% for “Imagine a Place” which is like a building or growth fund for our church. Also not listed here is $30 per month for Compassion International. Nobody tells us or pressures us to do it. Our pastor actually avoids topics about tithing because he feels it’s like him asking for money. I actually gave a recent sermon about tithing so the pastor didn’t have to last year.

    We choose the percentage we do and we are happy to do it. I find that giving is one of the most enjoyable things I do. We hope that with our next increase in income, we can increase our giving to at least 30% of our income. My long-term goal is 50% but I’m sure that’s a ways off.

    And while the amounts of these items are around the same every month, I put them in a micro budget because they are paid at different times. Tithe and Imagine a Place are paid when we get paid. Extra giving is simply as we feel we need to help someone or give to an organization. I like to keep track to make sure we didn’t forget to give in one of these areas as I feel they are the most important on our list.

  11. Caitlin says:

    @Kathryn and @Kyle – me too! We really need something like this for Canadians!!

  12. Damon Day says:

    I have heard an awful lot about Mint lately from the personal finance blogs I have been following. I have always used quicken and have never had any problems with it. Now that it is free is even better. I always have my clients go and set up a quicken online account as one of the first things to do when starting a plan for paying down debt. I haven’t had them reporting any major problems with them. So that may be an alternative for people that don’t have access to Mint. Not sure if Quicken works in Canada but they are a much larger company and have been around longer so there is a chance they have something for our neighbors to the north.

  13. Patrick says:

    I have been meaning to try mint out for a while, but some of the possible security issues have scared me away. I will have to sign up and at least give it a try to see how well it works.

  14. Nice approach! For some, any approach would be good– too many people have no idea where their money goes . . .

  15. I use an Excel spreadsheet. I can rearrange it into any configuration that suits me at the time, and I keep it password-protected on my home computer. I’m still a little leery about putting all of my personal info on the web.

  16. Matthew Van Gundy says: is a great concept and seems to have a lot of cool features, but I don’t think I could *ever* bring myself to use them with their current security model. I’m a Ph.D. student studying computer security. has come up in a number of conversations in our research group as an example of an unfortunate security design that needs improvement.

    I give the benefit of the doubt. I believe that they probably do everything that they can to protect your private information and your online banking credentials. However, nobody is perfect and security compromises happen. The fewer people/organizations that know your secrets (online banking credentials, transaction history, etc.), the fewer people that can reveal them.

    It’s not’s fault, they’re trying to create tomorrow’s web application using widely adopted (read yesterday’s) technology. I hope that some day soon it will be possible to write web applications that provide useful services with our online banking info without having to disclose all that information to the application developer. But, right now, the technology just isn’t here.

    For the time being, I’ll be doing any software-assisted budgeting on my home desktop.

  17. K says:

    An even easier way to budget is to use the 60/40 solution. Basically, no more than 60% of your before-tax income should be spent on regular expenses like food, rent or mortgage, car payment, etc. The buckets go like this:

    60%: all regular expenses like taxes, mortgage, food, car payment, utilities
    10%: short-term savings for irregular expenses like home or car repairs
    10%: long-term savings like an emergency fund or college savings
    10%: retirement savings
    10%: fun money- spend however you want

    You can change some of the percentages if you need to and also add a category for charity.

    Setup separate savings or checking accounts for each category and if you can setup different direct deposits, it makes it really easy.

    Then, you don’t have to track individual purchases. If your fun money account is low until next paycheck, then that is that. If your 60% account is continually overdrawn, then you need to cut down expenses in this area.

    This is based on an MSN money article I read a few years ago. This plan enabled me to save tons of money without having to carefully track things.

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